1. Field of the Invention
The present invention relates generally to a system and method for compiling advertising data and, more particularly, to a system and method for aggregating actual television (TV) advertising pricing data and providing users customized pricing reports.
2. Description of Related Art
Ever since the early beginnings of broadcast entertainment, whether radio, television, or in the more recent realm of the Internet, advertising has played a major role. Advertising is a major source of revenue for the entities selling the advertising, such as television networks, cable providers and syndicates, as well as a necessary part of doing business for the advertisers wanting to promote their goods and services. The purchasing of advertisements until this point has been quite skewed towards the entities that sell advertising time. For example, networks are able to set the price for a particular advertisement and convince advertisers to purchase advertising time based on that price, while advertisers have no real knowledge of the supply and demand involved for that advertisement and/or what other advertisers are paying or offering for the same time slot. While most advertisers try to plan and negotiate a fair price, because of the way advertising is bought and sold, advertisers do not actually know the cost of the advertisements in the shows they buy. Rather, the advertisers learn the actual prices that they paid after the fact, after their upfront purchases of advertising time have been processed by the networks.
Two methods of evaluating advertising efficiency are cost-per-thousand (CPM) and cost-per-point (CPP). CPM is a ratio based on how much it would cost to reach 1,000 viewers. For example, CPM would be the cost of an advertising spot purchased, divided by the total amount of viewers, divided by 1,000. Thus, an advertiser and/or network is able to determine the efficiency of a particular advertisement. CPP, on the other hand, is a ratio based on how much it would cost to purchase one rating point, namely, 1% of the population in the area being evaluated. For example, in order to calculate a CPP, one would have to divide the cost of the advertisements by the total number of rating points actually obtained. Thus, advertisers are only given actual “prices” for advertisements once networks have processed the viewing numbers and specific unit prices are assigned to specific shows based on the cost per thousand averages that the advertiser negotiated with the network.
Additionally, there are two primary buying methods, or markets, in which advertising time is purchased on network television. These two markets are referred to as the upfront market and the scatter market. The upfront market involves advertisers placing orders for advertisements that will appear in television programs running in future seasons. By buying in advance, or up-front, and committing to a full network season, the advertisers are usually given lowers prices than they would possibly pay later in a scatter market. The scatter market occurs much closer to the actual time that the advertisement is to appear. For example, advertisements may be purchased in September for shows that will run from October through December. In addition, as will be explained below, networks sometimes guarantee a certain CPM for buying in an upfront market. If the network does not deliver the guaranteed rating, it might run free commercials known in the industry as $0 commercials, to make up for the rating shortfall obtained in connection with the paid advertising.
In reality, with regard to TV advertising, advertisers make purchases of advertisements upfront and are not actually given a specific price by a network for the specific advertisement until right before the TV season is to begin. Because buyers have so little information about the overall market, it is easy for the networks to juggle advertisement slots to convince advertisers that they have made “a good deal,” while in reality they are paying more money than a competing advertiser is. For example, networks can quote prices for advertisement slots that are not really indicative of a price for that slot but rather an average or compilation of other pricing data.
Thus, a need exists for a method and system for providing advertisers with a more accurate evaluation of advertisement prices.